Millennium & Copthorne Hotels Regulatory News (MLC)

For Immediate Release 10 May 2019

MILLENNIUM & COPTHORNE HOTELS PLC

TRADING UPDATE

First quarter results to 31 March 2019

LEI: 2138003EQ104LZ1JNH19

Highlights for 1st quarter 2019:

* Like-for-like comparisons exclude the impact of acquisitions, closures and refurbishments; and they are stated in constant currency terms.

· Group RevPAR in constant currency for Q1 2019 decreased by 0.9% to £70.01 (Q1 2018: £70.65). Like-for-like* Group RevPAR decreased by 0.8%. Like-for-like* comparison excludes the Mayfair hotel and Millennium New Plymouth New Zealand.

· Operating performance was negatively impacted by refurbishment affecting major hotels in two of the Group's key gateway cities - London and Singapore. The Mayfair London property was partially closed in November 2017 and then fully closed in July 2018. The Orchard Hotel in Singapore has been under phased refurbishment since middle 2017.

· Total revenue in constant currency decreased by £9m, driven mainly by the impact of hotel refurbishment and lower contributions from the REIT hotels and property income.

· Pre-tax profit in constant currency for Q1 2019 decreased by £15m to £11m (Q1 2018: £26m). Profit was impacted by the Mayfair property refurbishment and lower contributions from Asian hotels, principally due to the Orchard Hotel Singapore refurbishment. In addition, REIT profit contributions were down by £3m and net finance cost was higher by £5m. In Q1 last year, CDL Hospitality Trusts recognised £3m profit from divestment of its two Australian properties.

· Management is in the final stage of discussions with Hilton regarding the Group's operation of the newly renamed Millennium Times Square New York, formerly known as the Millennium Broadway New York Times Square, as an affiliate of Hilton, with access to its reservation channels and loyalty programme.

· For the first 21 days of April 2019, like-for-like* Group RevPAR increased by 2.2%.

Mr Kwek Leng Beng, Chairman, commented:

"Despite the uncertainties and challenges in the global economy, we remain focused on making the best use of our hospitality assets. The Group is prioritising the refurbishment of our key gateway city properties to reposition our hotels, whilst seeking to minimise the short-term negative impact on our trading results. Operationally, we must successfully manage the refurbishment process and re-focus our sales efforts so as to improve yields. To that end, the affiliation agreement with Hilton for the Millennium Times Square New York will allow us to continue to manage one of our most significant hotels and help us to turn around the performance of the hotel more quickly."

Enquiries

Millennium & Copthorne Hotels plc Tel: +44 (0) 20 78722444

Tan Kian Seng, Interim Group Chief Executive Officer

Kok-Kee Chong, Chief Financial Officer

Jonathon Grech, Group General Counsel and Company Secretary

David Allchurch, Tulchan Communications LLP Tel: +44 (0) 20 73534200

FINANCIAL PERFORMANCE

For Q1 2019, hotel revenue in constant currency was down by £6m or 3.1% compared to the same period last year. Impact from Mayfair hotel closure was £3m.

Property revenues were lower by £1m or 7.1% in Q1 2019 as compared to last year due principally to lower sales of residential sections in New Zealand.

HOTEL OPERATIONS

For comparability, the following performance review is based on calculations in constant currency whereby 31 March 2018 RevPAR and average room rates have been translated at average exchange rates for the period ended 31 March 2019.

In constant currency, Group RevPAR decreased by 0.9% to £70.01 for the first quarter ended 31 March 2019. Average room rate was down 1.6% and occupancy increased by 0.5% points. Like-for-like Group RevPAR decreased by 0.8% compared to the same period last year.

# In constant currency whereby 31 March 2018 RevPAR and average room rates have been translated at average exchange rates for the first quarter ended 31 March 2019.

US

US RevPAR for Q1 2019 decreased by 1.4% to £69.17 (Q1 2018: £70.14). Average room rate dropped by 3.3% and occupancy increased by 1.1% points.

New York RevPAR fell by 1.5% to £111.69 (Q1 2018: £113.42) due to decrease in room rates by 3.6%; offset partially by increase in occupancy of 1.7% points. Regional US also has the same trend with a 1.5% decrease in RevPAR during Q1 2019.

The US federal government shutdown and Polar Vortex during January this year have negatively impacted demand, especially corporate transient and group travels. There were also two major non-repeat citywide events in Los Angeles and Minneapolis that took place during Q1 last year.

Europe

Europe RevPAR during Q1 2019 fell slightly by 0.3% principally due to the lower room rates.

London RevPAR increased by 5.3% to £82.93 (Q1 2018: £78.72). Occupancy increased by 4.4% points. Average room rate fell by 1.0% during Q1 2019. The Mayfair hotel, which has been closed for refurbishment since July 2018, is anticipated to re-open in mid-2019. Like-for-like London RevPAR excluding the Mayfair hotel increased by 4.9% with average room rate up by 5.1% and occupancy down slightly by 0.1% point. The higher average room rate was due to the substitution of a portion of the air crew business with higher price retail business at premium properties.

RevPAR for Rest of Europe dropped by 4.0% with decreases in both occupancy and average room rate of 1.9% points and 1.2% respectively.

Asia

Asia RevPAR during Q1 2019 decreased by 2.9% to £67.73 (Q1 2018: £69.78) due to decreases in both occupancy and average room rates of 0.6% points and 2.2% respectively.

Singapore RevPAR decreased by 2.4%. Occupancy was down slightly by 0.1% point. Average room rate was also down by 2.2%. The Group's hotels in Singapore continued to suffer from weaker demand from the corporate sector. The refurbishment work at Orchard Hotel involving guest rooms and public areas has also negatively affected the region's performance. There were certain non-repeat events such as Singapore Airshow and government meetings that took place last year.

Australasia

RevPAR for New Zealand during Q1 2019 increased by 2.2% with increases in both occupancy and average room rate of 0.1% point and 2.0% respectively.

Excluding Millennium New Plymouth which was acquired in February last year, like-for-like Australasia RevPAR grew by 2.3%. The three top contributors were Kingsgate Hotel Te Anau, M Social Auckland and Millennium Hotel Queenstown.

Developments

The Sunnyvale California project comprises the construction of a 263-room hotel and a 250-unit residential apartment block on 35,717m2 mixed use freehold landsite. The ground-breaking ceremony was held on 16 October 2018. Construction of the apartment element will commence first and the whole project is expected to complete in Q1 2021. The hotel will be branded as M Social to fit with the expected guest profile. Total construction cost is estimated at US$180m (£136m).

Architecture and engineering designs in relation to the construction of a 300-room hotel and a 250-unit serviced apartment complex on Yangdong development land, situated adjacent to Millennium Seoul Hilton, are still to be finalised. Total construction cost is anticipated to be around KRW130b (£87m).

Hotel refurbishments

The on-going refurbishment work at the Mayfair hotel which is now renamed The Biltmore, Mayfair, is expected to complete in mid-2019. The hotel will have 257 luxurious guest rooms plus 51 designer suites.

The refurbishment work of the public areas at the Orchard Hotel has substantially completed, with the ground floor lobby and F&B outlets completed in December last year and the ballroom and meeting spaces completed in March this year. The refurbishment of the 260 units of guestrooms at the Orchard Wing is currently still in progress, with 7 out of 11 floors completed. The remaining 4 floors are targeted to complete in Q2 2019.

Disposals

During Q1 last year, CDLHT disposed of its investment in two hotels in Australia, the Mercure Brisbane and Ibis Brisbane for A$77m (£45m) generating a profit of £3m.

Board & management changes

As previously announced, Mrs Vicky Williams will be joining M&C's Board of Directors as an independent Non-Executive Director immediately following the Company's Annual General Meeting scheduled on 10 May 2019. Ms Paola Bergamaschi Broyd joined the Board as an independent Non-Executive Director on 21 March 2019.

The search for a permanent Group Chief Executive Officer is on-going.

New accounting standard

The Group adopted "IFRS 16 Leases" with effect from 1 January 2019 using modified retrospective approach. IFRS 16 results in lessees accounting for operating leases within the scope of the standard in a manner similar to the way in which finance leases are currently accounted for under IAS 17 Leases. Lessees will recognise a 'right of use' ("ROU") asset and a corresponding financial liability on the balance sheet. The asset will be amortised over the period of the lease and the financial liability measured at amortised cost.

This announcement contains certain statements that are or may be forward-looking with respect to the financial condition, results or operations and business of Millennium & Copthorne Hotels plc. By their nature forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements. Undue reliance should not be placed on forward looking statements which speak only as of the date of this document. The Group accepts no obligation to publicly revise or update these forward-looking statements or adjust them to future events or developments, whether as a result of new information, future events or otherwise, except to the extent legally required.

Condensed consolidated income statement (unaudited)

for the three months ended 31 March 2019

The financial results above derive from continuing activities.

Condensed consolidated statement of financial position (unaudited)

as at 31 March 2019

Segment results

1 Hotel fixed charges include depreciation, property taxes & insurance and management fees.

2 EBITDA is earnings before interest, tax and, depreciation and amortisation.APPENDIX 1: Key OPERATING STATISTICS

for the three months ended 31 March 2019

For comparability, the 31 March 2018 Average Room Rate and RevPAR have been translated at average exchange rates for the three months ended 31 March 2019.

* excluding managed, franchised and investment hotels.

APPENDIX 2: HOTEL ROOM COUNT AND PIPELINE

as at 31 March 2019